Destroying Republicans

The only thing that can be said about Janet Yellen’s simple-minded paint-by-the-numbers performance yesterday is that the Keynesian apotheosis is complete. American capitalism and all political life, too, is now ruled by a 12-member monetary politburo, which is essentially accountable to no one except its own misbegotten doctrine that prosperity flows from the end of a printing press.

To be sure, this non-sensical and historically disproven proposition gets all gussied up in neo-Keynesian Fed-speak about dual mandates, monetary support to aggregate demand, “slack” in labor markets and remaining shortfalls from potential GDP, among endless like and similar jargon. But it did not take long during yesterday’s presser to reveal that Yellen’s mind dwells completely in a circular puzzle palace.

For once she got a decent question or two, but answered by lapsing instantly into ritual incantation about the macro-cycle the Fed pretends to be superintending. Thus, when asked about the tepid rate of business investment in future productivity and growth, the answer was: Right, that’s why we need ZIRP for longer! That is, until we can inflate the GDP tire by monetary accommodation, expect CapEx to run flat.

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